US Government Warns of Default as Early as July if Debt Ceiling Not Raised
U.S. Think Tank Predicts Mid-June
Treasury Survives Through Special Measures
No Agreement Reached Due to Republican Party Disagreements
If the U.S. Congress does not take measures such as raising the national debt ceiling, there is a prospect that the U.S. government could default as early as mid-July.
The Bipartisan Policy Center (BPC) released a press statement on the 24th (local time) stating that, based on recent data analysis, the so-called X date is estimated to occur between mid-July and early October.
The X date refers to the point when the special measures taken by the Treasury Department to avoid reaching the debt ceiling are exhausted; this ceiling is determined by the U.S. Congress.
Since January, the U.S. Treasury has been implementing special measures to prevent default caused by reaching the debt ceiling. Temporary suspension of payments to two federal employee funds is a representative example.
Although the Treasury has not specified when these special measures will be exhausted, the market estimates it will be between late July and late August. The conservative U.S. think tank, the Center for Economic Policy Innovation, expects the X date to be in mid-June.
Since last year, conflicts over raising the debt ceiling have continued between the Biden administration and the Republican Party. Former President Donald Trump insisted that the debt ceiling suspension be included in the temporary budget bill at the end of last year but withdrew this at the last minute. Within the Republican Party, opinions on the debt ceiling issue remain divided. The Republican House envisions handling Trump's tax cuts and the debt ceiling issue as a single package, but due to internal disagreements, no unified stance has been reached.
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In February, the Republicans in the House took the lead in passing a budget resolution that included $4.5 trillion in tax cuts and a $4 trillion increase in the debt ceiling.
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